Costa Rica: Used Cars Lose Appeal

In the past five years used cars lost 24% of market share due to improvements made in installment terms and interest on loans for buying new vehicles.

Wednesday, March 2, 2016

The market for used vehicles in Costa Rica has seen five years of decline, lacking attractive incentives for imports and being at a competitive disadvantage to the new vehicles market.

The Finance Ministry released data published by La Nacion which shows that the used car segment went from having a 54% market share in 2010 to a 30% share in 2015, down 24 percentage points.Meanwhile, the paper indicated, imports of new cars rose by 35% (going from 37,866 to 51,249 units) between 2013 and 2015.

See also: "Costa Rica: Record Imports of New Cars" reports that "... the credit options for bying new vehicles have increased, there are longer repayment times, lower interest rates and stability in the dollar. And as the number of new vehicles coming in increases, so does the secondary market for direct sales and cars delivered back to the agencies in exchange for a new ones."

See also: "Costa Rica: Taxable Value of Used Vehicles Under Question"

"... In 2013, the Ministry of Finance reduced, in stages, the rate of selective consumption tax for used cars that are more than three years old. But as this went tax down, the import tax value of cars rose . "

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More on this topic

Electric Cars: Incentives Increase Demand

April 2019

With the tax benefits granted to the import of electric cars, the number of units entering Costa Rica went from 40 in 2017 to 350 in 2018.

Last year, the Law of Incentives and Promotion for Electric Transportation came into force, which grants fiscal benefits to the import of electric cars, such as the exoneration of between 50% and 100% for sales, consumption and customs taxes, according to the import value of each car.

Red Numbers for the Automotive Business

January 2019

Costa Rica, Panama and Nicaragua are the Central American markets which reported reductions in sales of new and used vehicles during 2018.

According to figures from the Ministry of Finance of Costa Rica, from January to November 2018 imports of new vehicles totaled 31,008 units, and used vehicles 17,134 units, registering falls of 12% and 23% respectively compared to the first eleven months of 2017.

Guatemala Buys More New Vehicles than Used

July 2018

During the first semester of the year the sale of 108,000 new vehicles was recorded, well above the 67,000 used units sold in the same period.

According to figures from the Superintendency of Tax Administration, between January and June 2017 and the same period of this year, sales of new vehicles went up by 28%, rising from 84,075 units to 107,949 units.

Importers Demand Lower Taxes for Used Cars

July 2013

Sellers of used cars in Costa Rica believe there is discrimination in the way the Ministry of Finance estimates import taxes on cars.

According to Jose Carballo, president of the Costa Rican Automotive Chamber, the industry complains that 52% is charged for new vehicles, while used cars which are over six years old are charged 79%.

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